Chairman Oberman Dissents in Recent Board Decisions Granting Preliminary Construction Authority on the Transportation Merits

In two recent construction cases, Chairman Oberman has objected to the Board granting a petitioner preliminary construction approval based on the transportation merits but conditioning the approval upon completion of an environmental and historical review. 

The construction of a common carrier rail line requires Board approval.  An applicant can either apply to the Board under 49 U.S.C. §10901 or an applicant can petition the Board for an exemption under 49 U.S.C. §10502 from the approval requirements of section 10901.

Prior to 2007, an applicant could seek preliminary Board approval of a rail construction project, subject to completion of either an Environmental Impact Statement or an Environmental Analysis.  The Board established a new policy in 2007, that it would “not address transportation-related issues in construction proposals until the entire record, including the environmental record, is completed” because the petition could be later rejected when the Board considers the environmental impacts of the project.  Six County Ass’n of Governments – Construction & Operation Exemption – A Rail Line Between Levan and Salina, Utah, STB Finance Docket 34075, slip op.  at 2 n.4 (served Sept. 3, 2015).

Despite this stated policy, the Board has been admittedly lenient in its application.  In a January 2021 Decision, the Board stated that it had considered requests for preliminary decisions addressing the transportation merits of a project over the years,” but only once did it deny a request for a preliminary decision.  Seven Cnty. Infrastructure Coal. – Rail Constr. & Op. Exemption – in Utah, Carbon, Duchesne, & Uintah Cntys, Utah, STB Finance Docket No. 36284, slip op. at 8-9 (served Jan. 5, 2021)(Board Member Oberman dissenting)(“Seven County”).  The Board refers to this as a “two-step process” in construction cases. Id.

In Seven County, Chairman Oberman disagreed with the Board’s application of the two-step process granting preliminary approval on the transportation merits because he thought that the Board should wait until the environmental review process was completed after considering “significant environmental issues [that had] been raised.“ Id. slip op. at 13.  The Chairman also concluded that proponents should have been required to submit more persuasive evidence on the financial viability of the entire project before preliminary approval had been granted.  Id. slip op at 21-22.

Chairman Oberman expanded upon his criticism of the two-step process in Ken Tenn Regional Rail Partners, Inc. – Constr. & Op. Exemption – in Fulton County, KY. And Obion County, Tenn., STB Finance Docket No. 36328, (served July 23, 2021)(“Ken Tenn”).  In Ken Tenn, the Board issued a decision on December 1, 2020 granting the applicant preliminary approval of its petition for exemption based on the transportation merits, but pending the environmental and historic analysis.  Local landowners objected to the Board’s conditional grant and filed a petition for reconsideration.  The Board rejected the landowners’ petition with Chairman Oberman dissenting. 

In his dissent in Ken Tenn, Chairman Oberman expands upon his narrowly focused argument in Seven County to retrace the history of the construction exemption process and the Board’s reasoning for the 2007 policy.  Citing a variety of issues, Chairman Oberman places an emphasis on the Board’s role in considering not only the transportation merits of a proposal but also the Board’s responsibility for applying the National Environmental Policy Act and the National Historic Preservation Act.   He argues that the “transportation merits and the environmental impacts of a proposed construction project are inherently interrelated and must be considered in balance with each other.”  Id. 19.   He concludes that the Board should return to its 2007 policy and should not rule on the transportation merits of an application prior to consideration of the environmental and historic impacts except in exceptional circumstances.

Whether Chairman Oberman’s views on the two-step process signals an end to the Board’s current practice would require at least two other Board Members to join him in his analysis.  In Ken Tenn, Chairman Oberman was the lone dissenting opinion.  Board Members Begeman, Fuchs, Primus, and Schultz voted to reject the petition for reconsideration.  However, Board Member Primus issued a concurring opinion agreeing generally with the substance of Chairman Oberman’s argument against the Board’s two-step process but agreeing that reconsideration had not been justified.   Could change be on the horizon upon confirmation of Board Member Begeman’s nominated replacement, Karen Hedlund? Only time will tell if Ms. Hedlund agrees with Chairman Oberman’s views on this issue.

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